AJG vs XLF: Correlation
How closely do Arthur J. Gallagher & Co. (AJG) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.48, which is moderate.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are AJG and XLF?
Across a 3-year window, the weekly returns of AJG and XLF correlate at 0.48, moderate. The link has tightened recently: the 1-year correlation (0.59) runs above the 3-year figure (0.48). Stretching to 5 years gives 0.54, with an annualized covariance of 194.8 %².
By 3-year correlation, XLF places #17 of the 32 assets tracked against AJG. The last year tells two different stories: XLF led by 21.2 percentage points, -11.9% for AJG against +9.3% for XLF. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.03 to 0.66. Note the risk asymmetry: AJG runs 1.5 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
AJG vs XLF: side by side
| AJG (Arthur J. Gallagher & Co.) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | -11.9% | +9.3% |
| 5-year return | +91.1% | +64.2% |
| Volatility (ann.) | 25.0% | 16.2% |
| Beta vs S&P 500 | 0.36 | 0.84 |
| Max drawdown (3Y) | -44.4% | -15.5% |
| Market cap | $66.7B | – |
| P/E (trailing) | 43.1 | – |
| Dividend yield | 1.02% | 1.42% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $57.9B |
| Sector / category | Financials | Sector ETF |
XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Year-by-year returns
| Year | AJG | XLF |
|---|---|---|
| 2022 | +12.4% | -10.6% |
| 2023 | +20.5% | +12.0% |
| 2024 | +27.3% | +30.6% |
| 2025 | -8.0% | +14.9% |
| 2026 | +1.2% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
AJG represents 0.83% of XLF's portfolio, so part of any move in XLF is AJG itself, and the correlation between them is partly mechanical.
Are AJG and XLF good diversifiers for each other?
Reasonably. At 0.48, AJG and XLF keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between AJG and XLF?
The AJG/XLF correlation stands at 0.48 on a 3-year window (1 year: 0.59, 5 years: 0.54), computed from weekly returns as of 2026-08-27.
Is XLF a good diversifier for AJG?
Reasonably. At 0.48, AJG and XLF keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
What does a correlation of 0.48 mean?
On the −1 to +1 scale, 0.48 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
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Related comparisons
Hubs: AJG correlations · XLF correlations
